Cedi Depreciation Massively Collapsing Businesses…GUTA Laments

The Ghana Union of Traders Association (GUTA) is lamenting the near free-fall of the local currency, the cedi, against major trading currencies, is destroying local businesses.

In a statement signed by the President for GUTA, Dr. Joseph Obeng, GUTA warned that if measures are not taken to stem the fall, matters will soon get out of hand.

“The rapid depreciation of the local currency, the cedi against the major trading currencies, especially, the United States Dollar gives cause for alarm. It is taking a heavy toll on our capital and wreaking havoc on businesses in the country and also increasing financial burden on the consuming public,” the statement read.

It lamented that From December 2021 to date, the capital of traders has depleted by about 16%.

“In December 2021, when the rate of the cedi to a dollar was Gh₵6.4, a trader could use Gh₵640,000.00 to buy USD100, 000.00. Today, as the rate is about Gh₵7.6 to a dollar, the same Gh₵640,000.00 can buy only USD84, 000.00, thereby, making a loss of USD16, 000.00, which is the 16% depletion. Therefore, if one still wants to buy USD100, 000.00, he/she needs to find additional Gh₵120,000.00 to top up within this short period. This is very serious and needs urgent solution to save not only businesses but also the economy,” GUTA calculated.

The reason the depreciation of the cedi especially bites hard in Ghana is that the Ghanaian economy virtually imports everything, including plantain.

Moves by the previous Mahama government to confront the lack of a manufacturing base were truncated and abandoned when the Akufo-Addo government came into office promising to build a factory in every district.

However, six years into office, the government has not delivered on its so-called “One District, One Factory” project as promised

Meanwhile, some collapsing state factories that the government could have revived have been sold off, including the Komenda Sugar Factory that was refurbished, albeit controversially by the erstwhile John Mahama administration.

Earlier in the year, the cedi was rated the second worst-performing currency in Africa. Currently, it is the ultimate worst currency in Africa, according to available comparative data.